Do you pay close attention to the sales tax and fees your pay? As consumers we pay attention to the base price and consider that a “controllable expense.” Taxes and fees are beyond our purview and are viewed, at least by me, as an uncontrollable cost.
We have noted a trend where businesses, rather than raising their base price, are now adding fees and “surcharges” to increase their revenue.
Here are three examples.
Verizon just increased its “Administrative and Telco Recovery Charge” applied across its plans from $1.95 to $3.30, just over a 69% increase. As seen in social forums, the review from many Verizon customers is critical.
TikTok user @killjill said in a recent video that she was eating brunch at a restaurant with friends when she noticed a 3.5% surcharge for “staff benefits” on her bill. She said when she asked a restaurant worker what the “staff benefits” charge was for, they told her the charge was to cover healthcare for staff at the restaurant.
Another example we have witnessed is a small independent restaurant in Denver that charges 3% if a credit card is used. In that the customer is encouraged to pay by cash, that policy may violate the operational rules of the issuing credit card companies.
What is of interest is that it appears that these surcharges are creeping into the golf industry.
For the past several years, the Troon-managed Ridge at Castle Pines has charged, in addition to the base gree fee, a 6% surcharge for “water costs.”
Some golf courses are charging a “fuel surcharge” for gasoline-powered carts. Other golf courses are now stringently assessing single-rider cart fees. Because cart fleets vary from 55 to 80, should every golf seek a personal cart, a daily shortage would occur
Del Ratcliffe, PGA, President of Ratcliffe Golf Services, Inc., manages the Mecklenburg County Golf Course and is one of the industry’s most astute golf course operators. The golfer is assessed a $2.50 per player booking fee for the courses he manages.
Del stated, “this is probably the most controversial charge we do, and some golfers balk at paying the $2.50/player advanced booking fee. However, many realize that the fee is a way for them to get better tee times and better rates (if they pre-pay) so they don’t balk at it.”
It is noteworthy that Mecklenburg County also requires that golfers pay a $0.25 per round fee into the Mecklenburg County fund for “junior golf” activities.
It is not beyond reason that some golf courses might implement a surcharge for capital expenses.
With budgeting now begun in earnest by golf courses for the 2023 golf season, do you think adding fees and surcharges is prudent to boost your revenue without changing the green fees?
While it would be simpler and more transparent to raise your base green fee rate, nickeling and diming your customers with fees and surcharges may be a way to mask rate increases.
What are your thoughts? What is the preferred way to affect rate increases for 2023?